Could the SCO Expand Into the Middle East?

The Shanghai Cooperation Organization recently added India and Pakistan. Could Iran be next?

By Jonathan Fulton for The Diplomat

February 24, 2018

In June 2016, the world watched as the United Kingdom voted for Brexit and wondered what it would mean for the European Union and other pillars of the liberal international order. That same week, few were paying attention as the architecture of an emerging regional order in Asia added a new dimension. The Shanghai Cooperation Organization (SCO) held its annual summit in Tashkent, Uzbekistan, and announced that India and Pakistan would begin the process of becoming full members, joining China, Russia, Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan. It was the first time that the SCO admitted new members, and it may not be the last, with future expansion possibly bringing the SCO to the Persian Gulf.

In June 2017 another SCO summit was held, this time in Astana, Kazakhstan, when the admission of its two newest members was formalized. It is now the most populous regional organization, with three billion people, accounting for 17.5 percent of the world’s proven oil reserves, and as much as 50 percent of known natural gas reserves, and about 14 trillion dollars in GDP.

The SCO was formed in 2001, largely as a security forum. Governments throughout the region have shared transnational security concerns, described in the Chinese shorthand of the “three evils”: terrorism, religious extremism, and ethnic separatism. The need to coordinate on these issues has been apparent on several occasions, most recently in August 2016 when the Chinese embassy in Kyrgyzstan was attacked, killing the driver of the car which rammed into the embassy’s gate and injuring three Kyrgyz embassy workers. Kyrgyz and Chinese authorities said the driver was linked to Uyghur separatist groups, particularly the East Turkestan Islamic Movement (ETIM), a group labeled as a terrorist organization by both China and the United States. ETIM’s goal is ostensibly the establishment of an independent state called East Turkestan that would cover territory in parts of China’s Xinjiang, Kazakhstan, Kyrgyzstan, Uzbekistan, Pakistan, Turkey, and Afghanistan. As such, counterterrorism cooperation has been one of the pillars of the SCO which covers much of the same territory.

Until recently, it looked like the SCO would essentially remain a Central Asian security forum, but full membership for India and Pakistan signals a larger geopolitical ambition. On the face of it, admitting two nuclear states that have fought three wars against each other appears counterintuitive. However, it has been described as an opportunity to provide a platform to settle disputes among members. China has a long relationship with Pakistan and Russia with India, and the thinking is that organizational efforts could ease tensions in South Asia.

More likely, traditional realpolitik will play a part in maintaining order. Bilateral relations between China and Pakistan are already dense, with the China-Pakistan Economic Corridor (CPEC) a major part of the Belt and Road Initiative (BRI), described as “the most significant and far-reaching initiative that China has ever put forward.” Given this strategic importance for China, a stable Pakistan is vital. An SCO with only Pakistan as a member would isolate India and increase the potential for aggression; an SCO that includes both is one less threat to manage.

India is the world’s second largest arms purchaser, and Russia has long been among its top suppliers, an important element of what Russian President Vladimir Putin described as a “privileged strategic partnership” in a state visit to New Delhi last December. This relationship presumably provides a counterbalance to the China-Pakistan bloc.

While this round of SCO expansion has long been expected, a potential next round was discussed last spring: the upgrading of Iran’s status from observer state to full member. Iran applied for full membership in 2008, but the SCO had stated that countries under United Nations sanctions could not be admitted. The removal of sanctions in 2016 has opened the possibility of Iran joining, with Putin stating, “We believe that after Iran’s nuclear problem was solved and United Nations sanctions lifted, there have been no obstacles left.” China’s deputy foreign minister also expressed support for Iranian membership, saying that China“welcomes and supports Iran’s wish to become a formal member of the SCO.”

An interesting spillover effect of Iran in the SCO could be the further expansion of the SCO into the Middle East. Turkey is already a dialogue partner, and given its importance in the BRI, it could consider membership eventually as well. The Gulf monarchies also have significant trade relations with China, India, and Pakistan. Iranian membership could be the catalyst for Saudi Arabia and other Gulf Cooperation Council members requesting a seat at the SCO table.

There have also been signs that SCO cooperation is expanding beyond security issues to focus on trade and finance, something that China has long wanted but the other members have been cool toward, reluctant of Chinese economic dominance. A Heads of Government Council was held in Astana last November, and Chinese Premier Li Keqiang called for establishing an SCO development bank, and indicated that China is interested in pursuing a free trade agreement (FTA) within the organization, saying, “We are open to cooperation and ready to discuss the creation of a free trade zone. This will help to remove trade barriers. They hinder the development of countries and the world economy.”

Taken together with last May’s BRI summit in Beijing and the growing list of countries joining the China-led Asian Infrastructure Investment Bank, the SCO expansion appears to represent a China that is increasingly comfortable taking a leadership role in its own version of global governance. For the time being, it indicates the shape of an emerging China-centered Eurasian order, in which Xi Jinping is making China great again and regional states seemingly content to bandwagon.

SCO heads of state will meet again in June in Qingdao, China, and the Chinese Foreign Ministry has already confirmed that Iran will be participating. Regional observers will no doubt be paying close attention, anticipating the next round of SCO expansion and how it may affect regional affairs.

Jonathan Fulton is assistant professor of political science at Zayed University in Abu Dhabi, United Arab Emirates. His research focuses on China’s relations with the Middle East, Gulf International relations, and Chinese foreign policy. Follow him on Twitter at @jonathandfulton.